WONG CHI LEUNG v. JUBAULT BERTRAND ANTOINE

LDPE 106/2016

IN THE LANDS TRIBUNAL OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

APPLICATION NO LDPE 106 OF 2016

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DECISION
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1.  This is an interlocutory application by the respondent to set aside my order for possession made on 26 February 2016 in his absence as follows:

(1) The respondent do deliver vacant possession of the Premises to the applicant;

(2) The respondent do pay the applicant arrears of rent/mesne profits at the rate of $4,300 per month from 23 December 2015 until delivery up of vacant possession;

(3) The respondent do pay the applicant the costs of this application which is summarily assessed at $6,000.

2.  The respondent also applies for a counter-claim and stay of execution of the order for possession.

Background

3.  This is indeed the 3^rd application of the applicant for recovery of possession of the Premises known as Ground Floor, Rear Portion of No 48 Peng Chau Wing On Street, Peng Chau, Hong Kong (“the Premises”).

4.  The first application for recovery of possession of the Premises came before Deputy Judge Tracy Chan in LDPE 285 of 2015. On 1 June 2015, she ordered the respondent to (1) deliver vacant possession of the Premises to the applicant but subject to a relief until 22 June 2015; and (2) pay the applicant arrears of rent/mesne profits and costs.  The respondent then made payment on 22 June 2015 including the rent up to 22 June 2015 and therefore the tenancy between the parties was reinstated.

5.  In LDPE 861 of 2015 again on the application by the application for recovery of possession of the Premises on the ground of the respondent’s failure to pay rent since 23 June 2015, Member Ng granted relief to the respondent the second time on 24 November 2015. Reasons for the judgment were handed down on 1 December 2015.

6.  Then the respondent made an interlocutory application on 4 December 2015 for extending the relief expiration period and an order of the Tribunal was granted extending it to 15 December 2015.  The respondent did make payment on that day including the rent up to 22 December 2015.  The tenancy between the parties was therefore reinstated.

7.  To recap the background, there was a tenancy between the applicant as landlord and the respondent as tenant for a fixed term from 23 December 2012 to 22 March 2013, and this tenancy had continued as a monthly tenancy since its lease expiry on 22 March 2013 and the monthly rent was increased to $4,300 on or about 23 August 2013.

8.  No new tenancy agreement was signed and the tenancy continued from a month to month basis thereafter. Furthermore, by virtue of Clause  2 of the original tenancy agreement, it was reserved that:

“…… Upon expiry of the Tenancy Agreement, the Tenant shall give written notice to the Landlord in relation to tenancy renewal or withdrawal one month in advance… The Landlord shall notify the Tenant one month in advance if he intends to recover possession of the Premises.” (English Translation)

3^rd Application for Vacant Possession

9.  The applicant filed an application to the Tribunal on 25 January 2016 against the respondent for recovery of possession of the Premises.  The applicant submitted that by a letter dated 19 December 2015, a notice of termination was served on the respondent on the same date by leaving at the Premises being the respondent’s last known address and his usual place of business.  By the notice, the tenancy between the parties would be terminated on 22 January 2016 but the respondent failed to quit and deliver up vacant possession of the Premises to the applicant as required.

10.  In addition, the applicant submitted that the respondent has failed to pay rent for the period from 23 December 2015 at the rate of $4,300 per month.

11.  In his Notice of Opposition dated 5 February 2016, the respondent referred to the second relief granted by Member Ng afore-mentioned and suggested the period of notice of termination should be 6 months.

12.  As said, on the scheduled hearing day of 26 February 2016, the respondent did not appear.  Having heard the submission from Ms Annie Choi (“Ms Choi”) of Messrs Stephen Lo & P Y Tse, Solicitors who appeared on behalf of the applicant, I made the order afore-mentioned at §1 above.

Setting Aside

13.  Now, together with his interlocutory application dated 7 March 2016, the respondent filed an affidavit, stating inter alia that

(1) he was away from Hong Kong in a business trip to Dubai and therefore could not attend the hearing on 26 February 2016;

(2) the applicant is not the lawful landlord though he has been paying rent continuously to him for over 8 years save for the rental for 2 months overdue;

(3) he has been urging the Lands Department to enforce the short term tenancy held by the applicant;

(4) he is going to make a counter-claim against the applicant who has been harassing him and hurting him economically for the past 5 years.

14.  At the beginning of this hearing on 15 March 2016, the respondent appeared initially[1] to explain that he was away from Hong Kong after Chinese New Year in a business trip to Dubai.  He has not produced any evidence or passport that may support this was the case. Nevertheless, he does not deny that he received the Notice of Hearing which was issued by the Tribunal on 6 February 2016; he claims he failed to understand the importance of this notice or did not know the procedure of the Tribunal.

15.  Ms Choi responds that the respondent is not a new comer in the proceedings in the Tribunal and because of the previous applications for recovery of the Premises, he should have been well aware of the procedure of the Tribunal.  In any event, the respondent filed his Notice of Opposite late which was only one day before the Tribunal issued the Notice of Hearing.  In case the respondent was planning a business trip away from Hong Kong, he should have said so in the Notice of Opposition even if he did not bother to seek leave of the Tribunal so that another hearing day could be scheduled.

16.  After hearing the submission by the parties, I am satisfied that the respondent did not attend the hearing on 26 February 2016 of his own volition and the judgment was entered regularly.

17.  In Shockedand and Another v Goldschmidt and Others [1998] 1 All ER 372, the English Court of Appeal emphasized that the approach in default judgment is to focus primarily on the merits of the defence.  At p.379, Leggatt LJ said :-

“These cases relating to default judgments are authority for the proposition that when considering whether to set aside a default judgment, the question of whether there is a defence on the merits is the dominant feature to be weighed against the applicant’s explanation both for the default and for any delay, as well as against prejudice to the other party.” (emphasis added)

18.  Thus, where a default judgment has been entered regularly, the power to set aside the same is discretionary and such power is unconditional.  The respondent carries the burden to show that he has a real prospect of success.  To do so, he must satisfy the court that his case and the evidence that he adduces in support of it is potentially credible and carries some degree of conviction.  That is not to say that a respondent who is able to demonstrate a defence which has a real prospect of success has an automatic entitlement to the default judgment set aside.  In exercising its discretion, the court will have regard to all relevant circumstances. See: Hong Kong Civil Procedure 2016, §§13/9/12-14.

19.  To the extent that the respondent had suggested that he was promised a 6-month notice of termination by the applicant, Ms Choi submits that this is just a bare assertion which is not consistent with Clause 2 of the original tenancy agreement or the past dealings of the parties.  In any event, this is not the first application by the applicant on the issue that the respondent has rental payments fallen into arrears.

20.  I agree with the submission by Ms Choi.

21.  The other grounds raised by the respondent have already been dealt with by the Tribunal in the 2 previous applications by the applicant and particularly in the judgment by Member Ng dated 1 December 2015.

22.  Indeed, in Tang Chi Ho v Leung Woon-ling[1996] 2 HKLR 58, Godfrey JA remarked at §5 as follows:

“In addition, it is submitted on behalf of the tenant that the landlord himself has no interest in the property and therefore cannot accordingly institute any proceedings against the tenant. This assertion of a jus tertii is not open to the tenant. A tenant is not permitted to deny his landlord's title. If then the present landlord is the landlord of the tenant, this allegation that the landlord has himself no interest in the property would afford the tenant no defence.”

23.  As regards any related counterclaim by the respondent, it has been held in黃英對譚炳新, HCMP 2049/2000 (unreported, dated 1 August 2000), 陳燕群對黃金海, CACV 223/2007 (reported as [2008] 1 HKCLRT 27) and Ngai Ngok Pang & Another v Lee Syn Yuk, Michelle, LDPD 3030/2012 (unreported, dated 10 May 2013) that the Lands Tribunal does not have jurisdiction to entertain such counterclaim by the respondent.  Ms Choi also refers to §21 of the judgment by Member Ng on 1 December 2015 that:

“21. Although the respondent said that he would make counter claims in another court at the call-over hearing, he had not yet made such application before the further call-over hearing about two months later.”

24.  I agree with the authorities cited above that the Lands Tribunal does not have jurisdiction to entertain the respondent’s claim for damages or in the terms of the respondent, the set-off in monthly rent payable.

25.  More particularly in陳燕群對黃金海, supra, at §36:

“Regarding the Respondent’s counterclaim in DCCJ 809/2004, he is claiming for damages arising from the alleged breach of the tenancy agreement by the Applicant. If the counterclaim succeeds, the Applicant is of course liable to pay compensation, but it does not mean that the Respondent can continue to reside in or occupy the Property without having to pay any rent or outgoings. Therefore, in relation to the Applicant’s action for recovery of rent in arrears and repossession of the Property, the Respondent has failed to raise a defence recognized by the law. For this reason, on 8 June 2007, having dismissed the Respondent’s interlocutory application, the Lands Tribunal should have proceeded with the trial of the Applicant’s application as scheduled.”

26.  The respondent has failed to demonstrate it had a meritorious defence with real prospect of success. It will be determinative of the application to set aside.

CONCLUSION

27.  For the reasons aforesaid, the respondent fails to establish that the judgment was an irregular one and that there is any meritorious defence.  I dismiss the summons with costs which is summarily assessed at $4,000 in favour of the applicant.

[1] At the later half of the proceedings, the respondent sought leave to have his friend, Mr Antoine Depres, to represent him.